Gold/Euro – Cup & Handle (Continuation Pattern)

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Coffee-cup Good morning Slopers.  I hope this post finds you having a simply awesome weekend. 

From a subscriber this morning:

Gary, as a reader from Germany I appreciate your work a lot because we
are a country without precious metals companies, experience and
therefore little interest in this complex. I live in the Euro-Zone and
therefore I would be very much interested in your view about Gold
measured in Euro. Thank you very much in advance, –A"

Well, thank you
very much 'A'. Had you not mailed this morning, I would not have taken
a look at this compelling picture of gold-euro today. Aside from what I
consider to be bullish fundamentals for gold in all major currencies,
even as gold takes a much needed breather in USD, it looks technically
compelling in Uncle Buck's chief competition in the toilet paper
sweepstakes, the euro.

The chart shows a textbook Cup &
Handle, complete with the right side high of late November, '09 having
exceeded the February, '09 high. I always like to see the right side
(most recent) higher then the left (previous high) as this implies
momentum and allows for a higher measured target, which in this case
would be around 10 if and when the handle breaks consolidation to the
upside. I say if because we
do not try to predict, but rather show the probabilities. The
probabilities, both fundamentally and technically say 'GOLD GOING WELL


We'll keep an eye on gold's progress in euro and many other assets going forward, given the oncoming deflation whiff and its implications.